Businesses are always looking for easier, faster or more cost-effective ways to encourage key customer behaviors. Many manufacturers with specific goals turn to incentives such as discounts, limited-time promotions and exclusive coupons to motivate these behaviors. While these tools can be used to reward specific behaviors, they can also bring unwanted associations to your pricing, product or brand. Channel rebates, however, can be strategically employed to help your business achieve its goals while avoiding any of the negativity associated with a price cut.  

From increasing customer loyalty and channel sales to boosting under-performing SKUs and brand awareness, channel rebates are a powerful tool – but just what are these unique incentives, and how can you use them to grow your business?  

What Are Channel Rebates?

Channel rebates are a unique type of incentive program that can be structured to prioritize high-value partnerships. Most channel rebates are offered by manufacturers to distributors, rewarding them for marketing the manufacturer’s product to other retailers. Channel rebates are often structured around order size or frequency, with businesses tailoring the specifics of each deal to meet their needs and maximize the benefit for trading partners. Utilized effectively, these deals can have a significant influence on customer relationships and customer loyalty.  

Rebates allow businesses to offer competitive prices while driving specific behaviors that can increase margins, such as incentivizing customers to purchase higher volumes of product, buy products with a higher margin, order from a specific facility or repurchase products regularly. These unique incentives encourage both sides to work together and align their strategies in the interest of mutual benefit.  

Some of the most common goals for channel rebate programs are:

• Boost sales and revenue
• Grow your audience ‍
• Increase consistency of sales ‍
• Clear out inventory ‍
• Get more referrals ‍
• Expand brand awareness ‍
• Strengthen under-performing SKUs

How Do Channel Rebates Influence Customer Loyalty?

The basic idea behind channel rebates (and almost any other incentive program) is simple: customers are more likely to take the actions you want them to if they’ll be rewarded for doing so. However, channel rebates offer unique opportunities and benefits – namely in fostering healthy and dynamic partnerships, promoting strategic collaboration, increasing brand awareness and giving customers a concrete reason to stick with your business.

Channel rebates provide the opportunity to work strategically with your channel partners to assess your incentives and find unique business synergies that unlock opportunities for mutual growth. However, channel rebates’ influence over customer loyalty is proportional to their performance and their convenience. Data silos, delays, errors, payment disputes and a lack of transparency can make channel partners reluctant to continue an incentive program. A channel rebate can only strengthen your partnership, boost your sales or grow your brand if you manage it effectively.

Using Channel Rebates to Grow Your Brand

Channel rebates can help put your products in front of new audiences with the added benefit of a recommendation from a trusted source: a business they’re already buying from. This can be especially beneficial as your business expands into new areas where you may have very little market share. Building a strong reputation through connections and word-of-mouth can be a more effective foot in the door than attempting to brute-force your way into an unfamiliar market.

When sufficiently incentivized, channel partners can be very effective promoters. With channel rebates, you can leverage the unique knowledge and insights of your partners to provide mutual value by increasing brand awareness, bringing your products to new audiences, selling more of your neglected SKUs and a wide range of other benefits.

Overcoming Channel Rebate Challenges with Automation

Time commitment  

One of the main concerns that businesses have about taking on an incentive program is the perceived time commitment. The many responsibilities associated with managing rebates – collecting and analyzing data, tracking performance, calculating detailed forecasts – can seem like more time and trouble than they’re worth. A 2021 study by Zapier found that 76% of workers already spend up to 3 hours each day just moving data from place to place, while 73% spend that time tracking down information across various documents and sources. Fortunately, automation has cured many of these headaches. A capable rebate management platform can cut down almost all the time-intensive responsibilities of managing rebates to just a few clicks.

Complexity

The specter of miles-long spreadsheets stretching towards infinity have haunted the dreams of finance teams for decades, but new advancements in automated deal management are finally bringing these troubling days to an end. Employing an automated rebate management system can all but eliminate the need for overstuffed, confusing spreadsheets that few people on your team know how to navigate.

Human error  

Let’s face it: we all make mistakes. After staring at a blur of black and white for hours on end, numbers can start to look pretty similar, and noticing a single mistake in a sea of data can be a challenge for even the most seasoned data entry professionals. According to Zapier, 83% of workers spend between 1 and 3 hours every day resolving errors made by humans. This is why automation is changing the game for incentive programs. Platforms featuring automated data sharing and a centralized source of truth can significantly reduce instances of human error. When you can trust your data, you can make more informed decisions for your business.  

Are Channel Rebates Worth It?

Our vote is a resounding yes. Channel rebates can be a great way to drive customer behaviors toward your desired outcomes. While finance teams may be concerned about taking on cumbersome or time-intensive responsibilities, automated systems can be employed to overcome nearly all of the past inconveniences of spreadsheet-based rebate management. Sophisticated platforms such as Enable are making rebate management simple for everyone.

Are you ready to take your channel rebates to the next level? Schedule a demo to see the power of automated rebate management in action.